Middleboro Review 2: POLITICO Massachusetts Playbook: Democrats' tax dance

Wednesday, April 12, 2023

POLITICO Massachusetts Playbook: Democrats' tax dance

IT TAKES TWO (BRANCHES) TO TANGO — Once upon a time (read: last year) House Speaker Ron Mariano wouldn’t hear of slashing the state’s short-term capital gains tax rate.

Now he’s embracing the concept, for the sake of the state’s competitiveness. It probably helps that the idea originated from a Democratic governor this year rather than a Republican.

Oh, the politics of one-party rule.

The House’s tax-relief proposal largely mirrors the package Gov. Maura Healey put forward. But it also reflects Mariano’s ongoing concerns about the state’s fiscal future by slow-walking certain changes and hedging on others.

The reduction in the short-term capital gains tax rate, for instance, would take place over two years under the House plan, falling from 12 percent to 8 percent in the first year, and then down to 5 percent in the second. Mariano would also phase in over three years the $600 child and dependent tax credit that was one of Healey’s signature campaign promises.

And the House is only seeking to raise the estate-tax threshold from $1 million to $2 million — the number lawmakers had largely settled on before discussions were scuttled last session — rather than the $3 million the governor is pushing.

“We still don’t know where inflation is going to land. We are a bit concerned about revenues. And we’re concerned about just the general economy of the U.S.,” Mariano told reporters yesterday at the State House. The phasing-in of some elements is “an attempt to balance this and implement growth in a safe, controllable package.”

Still, Mariano echoed Healey’s concerns about making Massachusetts more attractive for businesses and doing more to keep residents here. House Democrats even added a new incentive by proposing a change to how state corporate taxes are calculated.

“The competitiveness issue is real, as we face challenges from states like North Carolina in some of the bio stuff,” Mariano said. “Part of the signal that we send with the capital gains changes is that we don’t want you to leave, that we want you to stay here. And I think that’s an important message.”

Business groups praised the House plan, as they did the governor's. But progressives and left-leaning groups offered mixed reviews — supporting increases in aid for renters and seniors but arguing that the state needs to be investing more money in areas like public transportation to be competitive, rather than rewarding the wealthy.

Moderate House Democrats' proposal falling slightly to the left of Healey's sets up some interesting dynamics for the Senate to play off of in its expected tax-relief package. But first, we'll get another sense of the state of play between the Legislature and the governor when the House releases its fiscal year 2024 budget today.

GOOD WEDNESDAY MORNING, MASSACHUSETTS. Are you running the Boston Marathon? (Here's looking at you, state Sen. Lydia Edwards). Email me at lkashinsky@politico.com for a chance to be featured in Playbook!

TODAY — Healey and Lt. Gov. Kim Driscoll meet with the Massachusetts Caucus of Women Legislators at 10 a.m. at the State House. Driscoll attends Massachusetts Agriculture Day at 11:15 a.m. and chairs a Governor’s Council meeting on sexual assault, domestic violence and human trafficking at noon; Healey attends. Boston Mayor Michelle Wu presents her FY '24 city budget at 9:30 a.m. Healey , Wu and Rep. Ayanna Pressley join Sen. Elizabeth Warren for the first town hall of her reelection campaign at 7 p.m. at Hibernian Hall in Roxbury.

WHAT ELSE YOU SHOULD BE READING

— MEET THE MAYORS: POLITICO has assembled 50 mayors — one from every state — to shine a light on the challenges their communities face and offer up the lessons they’ve learned on the job. Throughout the year, members of the inaugural Mayors Club will share their perspective on key issues that weigh on them and their peers, in both surveys and interviews. And Holyoke Mayor Joshua Garcia is repping Massachusetts. Dive in.

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DATELINE BEACON HILL

— UNPACKING THE TAX-RELIEF PACKAGE: “House’s billion-dollar tax plan echoes Healey’s ‘competitiveness’ goals through tax cuts, credits, and policy overhauls,” by Samantha J. Gross and Jon Chesto, Boston Globe: “The House plan would cost $654 million in the first year and nearly $1.1 billion once it takes full effect in three years, compared with Healey’s $1 billion proposal. Both proposals would, among other things, boost tax breaks for renters, families, and seniors. They would also overhaul estate and capital gains taxes. The House bill also would revise a 1986 tax cap law that caught lawmakers by surprise last year when it triggered $3 billion in refunds to taxpayers.”

— RELATED: “Poll: More than half of Mass. Republicans considered leaving state over past year,” by Ross Cristantiello, Boston.com: “The UMass Amherst/WCVB poll, the results of which were released this week, found that 53% of Republicans in Massachusetts have thought about moving elsewhere in the past year. It also found that 47% of independents had similar thoughts. Nearly four in 10 Massachusetts residents overall have contemplated the idea.”

— “Strained by housing crisis, Mass. funneling millions of dollars each month to shore up shelter system for homeless families,” by Samantha J. Gross and Mike Damiano, Boston Globe: “Last month, Governor Maura Healey signed a budget bill that will inject $85 million into the shelter system, which is operating beyond capacity and failing to keep pace with accelerating demand. But that infusion is likely to cover little more than half a year of costs, according to a Globe review of state payment records. … In February alone, taxpayers footed the bill for nearly $12 million of shelter space, office rentals, employee salaries, and, increasingly, hotel rooms the state rents at great expense because traditional shelters are full.”

— “Debate emerging on Beacon Hill over bill that would limit job security for veteran teachers to preserve educator diversity,” by James Vaznis, Boston Globe: “A legislative effort to increase the diversity of the state’s teaching corps could weaken job protections for veteran educators, a trade-off that has sparked controversy and drawn opposition from the state’s largest teachers unions.”

ROE FALLOUT

— “For Wu and Healey, reproductive rights become a selling point,” by Jennifer Smith, CommonWealth Magazine: “At events on Beacon Hill on Monday, the governor and mayor suggested the strong support in Massachusetts for reproductive rights could lure college students, businesses, and health care professionals away from the roughly two dozen states that have either banned or are likely to ban abortion.”

Healey expanded on that in an MSNBC interview : “Come to Massachusetts. We’re a great state, great place to live, great place to earn a living, great place to grow a family. And by the way, we’re going to protect your freedom.”

— MORE: “How UMass Amherst mobilized to procure the state’s 15,000 mifepristone doses,” by Hilary Burns, Boston Globe.

— SIGN OF SUPPORT: House Democratic Whip Katherine Clark and Reps. Jim McGovern, Lori Trahan, Jake Auchincloss, Stephen Lynch, Richard Neal and Ayanna Pressley joined more than 200 of their colleagues in signing onto an amicus brief in support of the Biden administration’s appeal of the Texas court ruling jeopardizing access to mifepristone.

FROM THE HUB

— “Boston celebrates the life of Mel King at South End funeral,” by Alexi Cohan, GBH News: “Mel King's former students said he believed in them when no one else would. Elected officials said he's the reason they were voted into office. His family said he was an inspiration to all of them.”

— "Mayor Michelle Wu to roll out $4.28 billion budget, highlighting ‘sustained investments’," by Emma Platoff, Boston Globe: "Boston Mayor Michelle is set to formally unveil Wednesday her proposal for the city’s $4.28 billion operating budget, maintaining investments in core city services while laying the groundwork for new priorities, including a new city planning department and green renovations to public housing."

— FIRST IN PLAYBOOK: The LGBTQ+ Victory Fund has endorsed John Moran for 9th Suffolk state representative. Moran would be the first openly LGBTQ+ person to hold the seat, his campaign said.

PLANES, TRAINS AND AUTOMOBILES

— “Multiple derailments quickly follow MBTA leadership change,” by Gayla Cawley, Boston Herald: “Two pieces of work equipment quietly derailed on back-to-back days on the Blue and Red Lines, an MBTA spokesperson confirmed. The derailments occurred within a roughly eight-hour time frame on the Blue and Red Lines Monday night and Tuesday morning, respectively, following positive press coverage that accompanied Phillip Eng’s first day as MBTA general manager.”

— “One man killed by MBTA train, another escapes injury on tracks,” by the Salem News.

DAY IN COURT

— “Federal embezzlement trial of four Boston police officers accused of overtime scam is underway,” by Shelley Murphy, Boston Globe: “Lawyers for four former and current Boston police officers accused of running an overtime scam out of the department’s evidence warehouse told jurors Tuesday that there’s no dispute they were paid for overtime hours they didn’t work, but said they were merely following longstanding practices accepted by top brass.”

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FROM THE 413

— “Online vitriol against Easthampton School Committee turns into real-life threats,” by Luis Fieldman, MassLive: “A controversy over a rescinded superintendent job offer set off a firestorm of online vitriol last week against school officials in Easthampton. Some officials say online harassment has turned into actual threats. … At least two committee members stated that they were visited by Easthampton police to warn them of threats made against them.”

THE LOCAL ANGLE

— “Somerset elects newcomer to Select Board,” by Bruce Mohl, CommonWealth Magazine: “Voters in Somerset elected a new member to the Select Board on Monday who has expressed interest in resolving a dispute that has stalled the sale of land at Brayton Point to an Italian company interested in building a $300 million factory to produce subsea cable for the offshore wind industry.”

— “Eversource to cut Mass. natural gas rates by up to 20%,” by Christian M. Wade, Eagle-Tribune: “The energy company, which serves about 1.4 million customers in Massachusetts, has filed a request to the state Department of Public Utilities that would, if approved, reduce the average residential customer’s bill by 15-20% a month, compared to last summer’s seasonal rates.”

— MEANWHILE, IN RHODE ISLAND: "Marvin Abney joins fray to replace Cicilline for Congress; 12th Dem to join," by Eli Sherman, WPRI.

HEARD ‘ROUND THE BUBBLAH

TRANSITIONS — Sam Mintz is now founding editor of Brookline.News. Ellen Clegg is co-founder of the new local-news venture. GBH News has more .

— Former Sen. Richard Burr (R-N.C.) is joining the Harvard Kennedy School’s Institute of Politics as a spring 2023 visiting fellow to finish out the semester.

— Micki Duncan is joining Bryson Gillette as a director of public affairs after working on Maura Healey’s gubernatorial campaign.

— Alex Nally has joined state Sen. Julian Cyr’s office as legislative director and deputy general counsel.

HAPPY BIRTHDAY — to Romneycare, Dan Manning, Ilya Rasner and Milo Zanecchia .

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